Financial Services and Credit Panel regulates financial advisers
The Financial Services and Credit Panel (FSCP) of the Australian Securities and Investments Commission (ASIC) has been expanded and given its own legislative functions and powers as the new single disciplinary body regulating financial advisers.
The Australian Government established the FSCP, accepting Recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Royal Commission recommended that a new single disciplinary system for financial advisers be established and that all financial advisers who provide personal financial advice to retail clients be registered.
The Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021 (Better Advice Act) received Royal Assent on 28 October 2021 and commenced on 1 January 2022.
Who needs to register with ASIC?
From 1 January 2023, all financial advisers who provide personal financial advice to retail clients must be registered with ASIC as a relevant provider. This is a new requirement for all relevant providers and includes relevant providers who were previously registered as individual tax (financial) advisers with the Tax Practitioners Board (TPB).
As at 1 January 2022, the TPB no longer regulates tax (financial) advisers.
However, those that are providing tax (financial) advice services but are not eligible to be registered with ASIC as a relevant provider (for example, partnership and company entities), will need to be registered with the TPB as tax agents.
A temporary exemption to register as a tax agent with the TPB applies until 31 December 2022 for these entities under the transitional arrangements, provided the entity:
- was registered as a tax (financial) adviser with the TPB as at 31 December 2021, and
- is not a relevant provider.
FSCP role and powers
The FSCP operates separately from, but alongside, ASIC in considering a range of misconduct, including lower-level misconduct by financial advisers.
ASIC must convene a sitting panel when it reasonably believes that a financial adviser is not a fit and proper person to provide financial advice or where a financial adviser becomes an insolvent under administration and ASIC is aware of this. When ASIC convenes an FSCP, each sitting panel must consist of one ASIC staff member and at least two industry participants.
Each industry participant is drawn from a pool appointed by the Minister responsible for administering the Corporations Act 2001. The list of presently appointed industry participants is included in the Australian Securities and Investments Commission (Financial Services and Credit Panels) Determination 2022. TPB Board members Debra Anderson, Craig Stephens and Judy Sullivan are among those appointed to the pool of FSCP industry participants.
The panel has a range of powers from directing financial advisers to undertake specified training to administrative sanctions including suspending or prohibiting their registration.
For further information about the FSCP refer to the ASIC website.
Last modified: 23 March 2022